LANSING, Mich. (WOWO) — Michigan is defending a new 24% wholesale marijuana tax set to take effect January 1, 2026, against lawsuits from cannabis industry groups. The tax was enacted as part of a $420 million road funding plan and signed into law by Governor Gretchen Whitmer in early October.

State attorneys argue the tax does not alter the text of the 2018 voter-approved initiative that legalized recreational marijuana. They say it builds on the original law, which allowed other taxes to apply on top of the targeted retail marijuana tax.

The Michigan Cannabis Industry Association and Holistic Research Inc., a licensed cultivator and processor, filed lawsuits seeking to block the tax. They claim the legislation circumvents constitutional requirements that would have needed a three-fourths legislative majority to amend the original voter-approved statute. Industry attorneys also warn the tax could force businesses to raise prices or reduce operations, potentially harming revenue, customers, and market share.

The lawsuits have been consolidated in Michigan Court of Claims by Judge Sima Patel. A hearing on a request for a preliminary injunction is scheduled for November 25 in Detroit.

State attorneys also cite legal protections under the 11th Amendment and a Michigan law that shields governmental agencies from lawsuits when performing official functions, such as collecting taxes.